'Ireland like the Titanic Unless we Steer New Course'
24 Sep 2010
Congress General Secretary David Begg has warned that unless Ireland quickly begins to steer a new course, our economy could go the way of the Titanic. Mr Begg'sspeech was delivered at a graduation ceremony for Union Learning Representatives in the National College of Ireland. Full text of speech below.
I want to begin by warmly congratulating all those who are receiving certificates tonight. It is a significant personal achievement. I also want to thank all those involved in the project from my own organisation and from FAS.
The concept of union learning representative was developed out of our experience in Northern Ireland. It is intended that ULRs will be a workplace repository of knowledge about opportunities for further education and training to whom people can refer for help and guidance.
Although the idea was conceived in different economic circumstances in response to the National Skills Initiative of ' one step up' it is, I believe, still vitally important, even if the focus of public policy has moved onto the unemployed.
Keeping people in employment where possible, and protecting their labour market employability where not, should be the cornerstone of active labour market programmes. The positive achievements of Continental and Northern European social market economies, even during this crisis, is testament to that.
Irish Model 'not fit for purpose'
In the last couple of weeks we have witnessed a number of interventions from senior figures in industry voicing concern about industrial policy. I suspect that there is a growing realisation in those circles that our existing growth model is no longer fit for purpose. If that is indeed the case then it is to be welcomed.
The enduring problem of Ireland, since the Lemass era, has been the inability of indigenous industry, with honourable exceptions, to match the performance of foreign direct investment companies. The Norwegian Academic, Lars Mjoset, attributed this failure to the lack of a national system of innovation.
With the economic crisis, and with increasing pressure from Europe on our corporation tax policy, we need to start reimagining our approach to comparative advantage. The only viable road is the high road - we can hardly sustainably revert to an industrial policy based on Eastern European wage levels.
That is why innovation is crucial to our future. The high road to industrial development means our people acquiring the skills to innovate right across the economy. It cannot just be the high flyers envisaged in the smart economy strategy - important though that is. That is where you come in.
There is a well established literature that posits that the key to comparative advantage lies in the institutional framework of each country. Having a network of experienced and committed union learning representatives can be an important part of Ireland's institutional framework for the labour market.
It is, I think, not fully appreciated how difficult it can be for someone to return to education in any form. The unique advantages of having access to a work colleague who is empathetic and supportive may yet prove to be very valuable. But, of course, if we do not respond wisely to the great crisis we are now facing in the economy much of this will be academic.
Ireland 'like the Titanic'
There was a story in The Irish Times on Thursday about two crucial errors which led to the sinking of the Titanic. The first error was that there were two steering systems on the ship, the operation of which required diametrically opposed operations. At the moment of crisis the ship's officers selected the wrong system and steered the ship straight into the icebergs. The second error was to keep steaming ahead even though the infrastructure of the ship was badly damaged.
It struck me, sadly, that this is an apt methaphor for what is happening to our country.
The budget deficit must be reduced. But almost the entire economic and political establishment has decided that borrowing must be reduced to below 3 percent of GDP by 2014. Why? What is so critical about that figure and that timescale?
For over a year now Congress has argued that the consequence of following this course will be to prevent growth from re establishing itself. Without growth we are in a downward spiral of further contraction and deflation. Just like Japan in the 1990s we are facing a lost decade.
The data published by the CSO yesterday reveal that the economy is still contracting. If, in these circumstances, if we take another €3 billion - or perhaps more- out of the economy in December's budget, we will kill the possibility of growth reigniting.
Like the officers of the Titanic, by steaming on, we will compound our first error with a second. We must slow down and change course before we do irreparable damage to the economy and society.
ends